Kingdom of Sw eden Swedish National Debt Office Swedish National - PowerPoint PPT Presentation

Kingdom of Sw eden Swedish National Debt Office Swedish National Debt Office Euro Debt Crises and Effects Euro Debt Crises and Effects of New Regulations World Bank Meetings W Washington, October 2010 hi O b 2010 Thomas Olofsson, Director and Head of Debtr Management

Euro Debt Crises Euro Debt Crises • Pre Crise condition with tight yield spreads g y p • After Lehman 2008 liquidity spreads widened • Spring 2010 credit spreads widened after debt p g p increase • ECB ”QE” measures • Debate on fiscal policy: need for budget consolidation • Strong commitment to Euro • Special purpose vehicle 2

Spread to Germany Spread to Germany Government Benchmarks, Bid, 10 Year, Yield, Close, EUR 250 225 200 175 150 125 Percent 100 75 50 25 0 -25 jan mar maj jul sep nov jan mar maj jul sep nov jan mar maj jul sep nov 08 09 10 Belgium Germany Spain Finland Netherlands Italy Source: Reuters EcoWin 3

Spreads to Germany Spreads to Germany Ränteskillnader mot tyska 10-åriga statsobligationer 250 200 150 100 Percent 50 0 0 -50 -100 jan mar maj jul sep nov jan mar maj jul sep nov jan mar maj jul sep nov jan mar maj jul sep nov 07 08 09 10 France, EUR Sweden, SEK Spain, EUR Netherlands, EUR Source: Reuters EcoWin 4

If regulations don’t work – add more regulations • Higher capital requirement g p q • Leverage ratios – postponed • Ban of short-selling? g • Solvency 2 • Too big to fail-regulations Too big to fail regulations • Liquidity ratios • The future role of banks in jeopardy? • • Plan B Plan C Plan B, Plan C… 5